Strategies for Companies in Star Stage

The BCG Matrix is a strategic management tool that helps organizations assess their business portfolio in four dimensions: market share, market growth rate, relative market share, and market position. The matrix categorizes businesses into four quadrants - Stars, Cash Cows, Question Marks, and Dogs. A Star organization has high market share and high market growth rate, and can move forward by using market penetration, product development, or diversification. If the firm is already in a Star position and wants to remain there, it can use vertical and horizontal integration, market penetration, product development, or market development. The BCG Matrix has both benefits and limitations, including neglecting synchronization between different business units and considering market share as the only success factor. Despite its limitations, the BCG Matrix provides a framework for managers to assess their business portfolio and make informed decisions about investment and resource allocation.

Reflection on competitive strategy
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Table of Contents
INTRODUCTION ...............................................................................................................................3
REFLECTION .....................................................................................................................................3
REFERENCES.....................................................................................................................................6
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INTRODUCTION
The importance of competitive advantage cannot be over or under estimate because it helps
the companies in the different aspects of the business. With the application of it, an effective
marketing strategy develops to survive in the market (Sharma, 2016). Along with this, it assist the
management to formulate various long and short term objectives to achieve the success. In this
context, for the organizations, it is important that competitive strategy should be unique from the
rivals and develop the business in the direction of sustainability (Meer, 2010.). The present report is
based on reflection of competitive strategy and to understand the usefulness of the tools of strategy
and evaluation, BCG (Boston Consultancy Matrix) is taking into the consideration. The objective
that will cover under current study will be role of strategic tools in strategy management and its use
in formulation of the different strategies (LI and LI, 2011).
REFLECTION
During the study, I have learned various theories that are presently used by the organizations
for the various purpose such as strategy formulation, evaluation of the current tactics, development
of the long and short term objectives and plans etc. From the analysis of the various case studies of
the companies, I have found that the reasons and purpose behind using of theories and models have
varied as per the nature of business. In this context, I have gained the knowledge about the strategic
management that uses for managing several processes and activities. It involves formulation and
implementation of the objectives and goals that are taking by the top management by considering
the limitations of the resources and evaluation of internal and external environment where company
is competing. Strategic management include two concepts strategic planning and strategic thinking.
Strategic planning is analytical nature and produce the different process to analyse the inputs and
synthesizes the outcomes that is ,in the form of strategy (The BCG Matrix, 2011). So, I have
analysed that strategic management have two major processes: formulation and implementation of
the strategies.
One of the strategic management theory that I have recently studied and new for me that is
BCG matrix. After the reading, I have found that it is a corporate planning tool where planning is
form on by considering the two dimensions: market share and market growth. This following tool is
also called from the name of growth share matrix where the two dimensions helps in evaluation of
potential of business brand portfolio and according to it, the various investment strategies can be
select and implement. Along with this, I have learned that with the help of this framework, the
strategic position of the business in the market can be analysed and take the decisions of bring the
changes in the current market position of the firm.
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On the basis of my personal experience, I have explored by study BCG strategic
management theory, a business portfolio can be categorised into four sections: star, question marks,
cash cow and dog. So, on the basis of this categorise, an enterprise can determine that in which
brand or product line, it should be increase or decrease the investment level and from which one,
firm should be divested. On the other hand, I have gained the knowledge that relative market share
can be divided into two levels: high and low. For example, higher market share delivers the higher
cash return to the organization. Along with this, it may be possible that some firm may experience
same things ever they have lower manufacturing outcomes and minimal lower market shares.
Similarly, market growth rate can be categorise into high and low level.
As per the my perception that are according to my learning towards the first dimension Dog
of BCG matrix is it contains lower market share and lower growth rate. Generally it is not
considering as worth to invest more money because it generates low cash returns. But some times,
the dog is also delivers the long term of profit to the company because it helps the firm to take
defensive actions against the competitors move (Palia, De Ryck and Mak, 2014). So, in this
situation, I have found that with the help of retrenchment, liquidation and divestiture, an enterprise
can come from the Dog situation and survive in the market.
Rather than this, I have also gained information that by using product development,
diversification, divestiture and retrenchment, a company can move from cash position to the rest
other dimensions star and question mark. On the other hand, if the organization is in the question
mark where it has low market share and high market growth rate than with the help of market
penetration, product and market development etc. it can be move forward in star stage. Beside this, I
have analysed that if the firm is in star position and wants to remain at the same position where
market share and market growth rate both are high. So stay remain at the same position, company
can use vertical and horizontal integration, market penetration, products and market development.
But from the evaluation process, I have found that BCG matrix have both benefits and
disadvantages. In the positive aspect, it helps the managers of the companies to assess the business
portfolio in four dimensions ad take the decision whether the more investment is good or not. Along
with this., I have also analysed that it has provided a base to the management for taking the future
decisions of business expansions. It is also helps the effectively allocation of the resources so that
firm gets the benefits of high competitive advantage (Zheng, Han and Jiang, 2011). But I have
gained the knowledge that BCG matrix has neglects the effects of synchronization between different
business units that is is the negative aspect of this strategic management theory. In addition to this,
market share cannot be consider as a only and only success factors. Beside this, I have also explored
that a business which is operating in lower market share can be profitable for the growth of the
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organization. Rather than this, market growth cannot be consider as an indicator for attractiveness
of a market or industry. Therefore, from the learning of new strategic management theory, I have
learned that BCG matrix helps in evaluating the present condition of the business in the market
although it has several advantage and limitations.
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REFERENCES
Books and Journals
LI, X.L. and LI, H., 2011. Research on the competitiveness of Shandong province’s oceanic
industry based on BCG matrix [J]. Journal of Qingdao University of Science and
Technology (Social Sciences), 4, p.013.
Palia, A.P., De Ryck, J. and Mak, W.K., 2014. Interactive Online Strategic Market Planning With
the Web-Based Boston Consulting Group (BCG) Matrix Graphics Package. Developments in
Business Simulation and Experiential Learning, 29.
Zheng, J., Han, J. and Jiang, H., 2011. How to identify the leading industry in the service sector for
Xiacheng district of Hangzhou: Based on BCG Matrix and location quotient.
In Management and Service Science (MASS), 2011 International Conference on (pp. 1-4).
IEEE.
Online
Meer, N., 2010. The Importance of Competitive Advantage. [Online]. Available through:
<http://www.sharenet.co.za/marketviews/article/The_Importance_of_Competitive_Advanta
ge/1650>. [Accessed on: 2nd May, 2016].
Sharma, M., 2016. Significance of Competitive Advantage. [Online]. Available through:
<http://www.yourarticlelibrary.com/business/significance-of-competitive-advantage/
49177/>. [Accessed on: 2nd May, 2016].
The BCG Matrix. 2011. [Online]. Available through:
<http://strategiccoffee.chriscfox.com/2011/01/bcg-matrix.html>. [Accessed on: 2nd May,
2016].
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